Martinez, 28, will leave Porto this summer but the Portuguese giants are insistent that any potential buyers must activate the striker's €35m (£25.5.m) release clause.

According to the Daily Telegraph, Arsenal have considered a move for the Colombia international but looked to have missed out when Porto president Pinto da Costa claimed the player had decided on a move to Milan, as reported by the Guardian.

But it would now appear the Rossoneri have pulled out of the race to sign the Porto star with CEO Adriano Galliani suggesting the club will use funds previously set aside for Martinez to pursue other targets.

His comments act as a second decisive blow to the club's ambitious summer plans after Milan lost out to rivals Inter in the battle to sign Monaco midfielder Geoffrey Kondogbia.

"If we save €40m on Kondogbia and €35m on Jackson Martinez, we will have another €75m to spend wisely over the rest of the transfer window," Galliani told La Gazzetta dello Sport.

"Whether it is a good or a bad thing, only time will tell.

Martinez, a player Arsene Wenger has openly praised in the past, would appear to favour a move to the Emirates, telling Portuguese outlet A Bola: "Arsenal are a great team, in one of the world's best leagues and I am waiting to find out what my future holds.

"I still don't know, but the day when I find out is getting closer. For now, I am focused on the Copa America."

Of Martinez, Wenger said in February: "He has top physical strengths. Hugely efficient, he is the kind of player who can make room for himself in the box," Wenger said in February.

"He could play in the Premier League because he has the body to make the difference. He uses it in a very intelligent way. He has a very short back lift and he's a very good finisher. He's on the list of many clubs, you know that."